tag:www.lewismonroe.com,2013-03-21:/blog/813032019-02-15T20:16:16ZMovable Type Enterprisetag:www.lewismonroe.com,2019:/blog//81303.36299482019-02-16T22:34:01Z2019-02-15T20:16:16Z
Chapter 7 bankruptcy, also called liquidation bankruptcy, is a kind of bankruptcy that allows you to get out of debt by eliminating your debts through legal action. To do this, you must be willing to give up certain items that are not exempt from liquidation. They are then sold, and the proceeds are used to repay creditors. Once the proceeds are used up, the remaining debts are forgiven.

Being able to eliminate all unsecured debts (alimony, tax debts and student loans are not usually dismissed)

Having no repayment plan

Completing bankruptcy in around 3 months

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There are disadvantages, though, like having to give up some of your personal property. Not all debts are able to be discharged through this form of bankruptcy, and the bankruptcy will remain on your credit report for up to 10 years, impacting your ability to obtain credit in the future.

There are alternatives to bankruptcy, one of which is similar to bankruptcy itself. If you can liquidate your own assets and pay off your debts, this can be a good way to get out of debt without the long-lasting impact of a Chapter 7 bankruptcy. You can negotiate with your creditors to obtain settlement offers, which you can then pay off for a fraction of what you actually owed on your debt.

Your attorney can talk with you about bankruptcy alternatives and whether going through bankruptcy is a wise choice for you. If the alternatives will not work out well, bankruptcy is sometimes the better option to choose.

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tag:www.lewismonroe.com,2019:/blog//81303.36279762019-02-14T23:11:34Z2019-02-14T23:10:34Z
As of January 2019, more than 7 million borrowers are 90 days or more behind on their car loans, according to the New York Federal Reserve. That’s 1 million more than the previous high in 2010 when the U.S. was in the Great Recession. The Fed also noted a $584 billion jump in total auto loan debt, the highest number in the 20 years the Fed has been keeping this data.

The source of the increases: More sub-prime auto loans offered by auto finance companies to less-qualified borrowers. While the number of auto loans has jumped, it also means there are more borrowers at high risk of delinquency, according to the report.

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With more bad loans and more people taking out loans, that means more people handing over the car keys to finance companies in lieu of payment. Personal bankruptcy may not be far behind.

Some more car loan data

The research firm Edmunds found that auto debt is rising partly because Americans are buying trucks and SUVs rather than sedans and compact cars. Edmunds reports that the average price of a new vehicle is $37,100, compared to $27,573 five years ago.

To finance the bigger cars, the auto loans are longer in duration. Edmunds found that the average loan today is 69 months compared to 61 months in 2010.

All these figures mean more people will face unpaid debt, low credit scores and bankruptcy. Is there a way for you to avoid falling in this trap?

The best way to avoid ending upside-down on a car loan is to arrange for your financing before you buy. If you get pre-approved for a loan through your bank or credit union, you will likely receive a smaller interest rate than the one offered by the dealership or the sub-prime loan finance operation. This will save you several thousand dollars through the life of the loan.

When you arrange your loan, put as much money down as possible – as much as 20 percent if you can afford it – and keep the length of your loan to three years to keep the amount you pay in interest low. A shorter loan also helps you avoid your car depreciating faster than the value of your loan.

The best advice is not to buy too much car – consider buying a used car instead of new.

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tag:www.lewismonroe.com,2019:/blog//81303.36029972019-01-30T09:52:07Z2019-01-30T09:51:07Z
With the new year, there is no better time to look over your estate plan. Each year, it's a smart move to do this, since new laws, especially tax laws, could impact your estate.

In 2019, the federal exemption for an estate is $11.4 million per person, which is up from the previous $11.18 million in 2018. This is also a dramatic increase from 2017 when the maximum exemption was only $5.49 million per person. Now, if you have assets in the amount of $11.4 million or less, you won't have to pay federal estate taxes.

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Since you're living with Florida as your primary residence, there is great news about state estate taxes; Florida does not tax estates or inheritances. This exempts all of your assets, which is ideal for families and one reason why so many people do move to Florida at retirement age. Even if there is a threat of state taxation in other states, there are ways to address that.

Even though there may not be any risk of taxation presently, the rule of thumb for estates is not to become complacent. It's a good idea to look over your estate at least annually so that you know it's still within the confines of the law and that it will stand in court.

Our website has more information about estate planning and how you can get started if you haven't yet created a will, power of attorney or other essential legal documents. It's never too soon, or too late, to start your estate planning or to update your estate plan to make sure it's still prepared to carry out and protect your wishes.

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tag:www.lewismonroe.com,2019:/blog//81303.35839162019-01-16T23:50:50Z2019-01-16T23:49:50Z
Bankruptcy isn't easy to go through no matter what situation you're in, but it can be made easier if you're prepared to take the steps you need to take before you file. Doing your best to try to renegotiate contracts and free up capital could help you avoid bankruptcy with your business, but if you can't, then your attorney may suggest a type of bankruptcy to help you.

There are several kinds of bankruptcy for different situations, but one of the most commonly used for businesses is Chapter 11. Chapter 11 bankruptcy is also known as restructuring bankruptcy. It allows your business to remain open while you negotiate new contracts and create a plan to help your business move forward in the green.

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With a Chapter 11 bankruptcy, you need to propose a plan for reorganization. This plan will discuss how you plan to move forward with your business and pay back creditors over time. New arrangements can be made to make this affordable for you while allowing you to continue running your business in the meantime.

A Chapter 11 bankruptcy is relatively inexpensive compared to the potential loss of a business. It costs $1,167 and has an administrative fee of $550 as of January 2019. If this is too much to pay at once, the court does allow it to be paid in installments if you seek permission.

Your attorney can discuss Chapter 11 bankruptcy with you and if it's the right choice for your business. It's one option that could help you continue to run your business despite challenges.

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tag:www.lewismonroe.com,2019:/blog//81303.35790052019-01-11T21:21:34Z2019-01-11T21:20:34Z
Paying bills is usually not a pleasant experience. They always seem to be higher than you thought they would be and each time you make a payment your bank account balance goes down. Though paying bills is a necessary evil that many people dread, the feeling after missing a payment can be much worse.

Missing a credit card payment is not always due to the fear of reducing your bank account or seeing the new balance. Sometimes you may have just forgot the due date or simply do not have enough money in the bank to make the minimum payment. Credit card companies can even get sneaky about payment dates, requiring you to make payments online up to seven days before the due date for what they call “processing.”

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Late credit card payments are understandable and can happen easily. Sometimes you can call the credit card company and ask them to forgive you, but that can usually be a hassle. Late credit card payments will have consequences.

Consequences of late credit card payments

Late fees – A missed or late credit card payment will accrue a fee of anywhere between $25 to $38. If you fail to make the minimum payment you will also be subject to a late payment fee. If you totally forget to make a payment, you may be shocked to see the new minimum balance which will include the missed balance and the current balance.

Credit score – One of the biggest factors that goes into determining your credit score is payment history. Your payment history accounts for 35 percent of a credit score, which means a late payment will influence your rating for the worse. Late payments will also stay on your credit report for up to seven years which potential lenders can also see. The amount of money you missed paying will not play any role in adjusting your credit score, so it will not matter if it was a missed $20 payment or $250. When it comes to how your credit score factors late payments, it goes by length of delinquency, how much you owe, how many late payments you have and how long ago the late payment is from.

Interest rate increase – Late payments can trigger an increase in interest rate that is applied to the card. Interest rates can get as high as 29.99 percent. This increase will add significantly to your overall balance and could take six months to a year of on-time payments to have it considered by the issuer to be lowered again.

If you are struggling with debt and having a difficult time staying current on your credit card bills, you may want to consider speaking with an attorney about the option of filing for bankruptcy. You may find there are benefits to a bankruptcy filing and it can immediately stop collection calls from credit card companies.

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tag:www.lewismonroe.com,2019:/blog//81303.35668352019-01-04T08:29:38Z2019-01-04T08:28:38Z
Bankruptcy is an option that you have when you have so many debts that you cannot pay them back on time or with any certainty. Some people opt for bankruptcy to get a fresh start, while others turn to it with no other options.

The good thing about bankruptcy is that there are different types. Chapter 7 bankruptcy, known as liquidation bankruptcy, helps you by liquidating assets. Some people believe that they'll lose everything through this kind of bankruptcy, but exemptions make it possible to maintain many of the things you already own.

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Another kind of bankruptcy, Chapter 13, is designed to help you make a single payment monthly on your debts. Over the course of 3 to 5 years, you'll pay off your debts completely.

Why should you consider bankruptcy?

Bankruptcy isn't right for everyone, but you should consider it if you have multiple unsecured debts that you're struggling with. It's possible to eliminate your unsecured debts so that you can get back on firm financial footing.

Are there debts bankruptcy won't eliminate?

Normally, bankruptcy doesn't eliminate debts such as back taxes, child support, spousal support or student loans. However, there may be ways to reduce what you owe on those debts if you can show that you are in a difficult financial position.

Our site has more on bankruptcy and what to expect if you're struggling with debt. There are options available to you so that you can get back on track with your finances. Choosing the right kind of bankruptcy will help you move forward with better financial security.

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tag:www.lewismonroe.com,2018:/blog//81303.35577472018-12-22T00:11:34Z2018-12-22T00:10:34Z
Are you prepared in case something unexpected happens, causing your to be seriously injured and unable to make decisions for yourself? The future is uncertain, so regardless of your age, it may be beneficial to have both a living will and a health care surrogate to ensure you are as prepared as you can be.

Because both documents address the care you want to receive when you are unable to advocate for yourself, people are sometimes confused about what each document does and why they should have both. If you, like many people, are uncertain about the differences, it may be helpful to learn a little more about what a living will and a health care surrogate can offer.

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What can a living will and a health care surrogate do?

A living will is a document that explains the medical treatments you do and do not want to receive in various circumstances. It can also include other medical preferences, regarding things like pain management and organ donation.

A health care surrogate is someone who you appoint to make medical decisions for you if you become unable to make them for yourself. Your health care surrogate should be someone you are comfortable sharing medical information with and who you trust to make the decisions you would prefer, instead of decisions in his or her best interests. For these reasons, many people choose a family member or close friend to be their health care surrogate.

Should you have both?

Although it is best to address many possible end-of-life decisions in your living will, it is unrealistic to account for every possibility. Your health care surrogate cannot act against the wishes you made in your living will, but can make decisions in circumstances that were not addressed in your living will. In this way, a living will and a health care surrogate can complement each other to ensure you receive the care you want in any situation.

A living will and a health care surrogate are not only for the elderly. These are estate planning tools that every adult can benefit from.

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tag:www.lewismonroe.com,2018:/blog//81303.35525372018-12-18T13:17:38Z2018-12-18T13:16:38Z
Bankruptcy isn't always the first thing you want to try if you're falling behind on bills, but it is an option when you can't see a way to get control of your debt. As a business owner, you want to see your business succeed, but there are outside influences that could hold you back.

If your small business ends up being in over its head in debt, you have three types of bankruptcy that you can choose from that could help. Keep in mind that you, personally, might be responsible for the debts of your business unless you structured it as a corporation or LLC.

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Why choose Chapter 7 bankruptcy for a business?

Chapter 7 bankruptcy is liquidation bankruptcy, so you will have to sell all the business' assets. If you did not create your own business entity and are responsible for the debts you took on for your business, then you may also have assets that must be sold to deal with the bankruptcy and debts you've accrued.

The good thing about Chapter 7 bankruptcy is that it allows most debts to be discharged without repayments. The only repayments you'll make come from the assets sold by the bankruptcy trustee. The best thing about that is that there are exemptions that could help you protect many of the things you own, so you don't have to worry about being completely wiped out by bankruptcy.

Choosing the right bankruptcy option can be hard, so it's usually best to discuss your options with someone who is familiar with these three forms and others.

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tag:www.lewismonroe.com,2018:/blog//81303.35459522018-12-12T23:31:34Z2018-12-12T23:30:34Z
Declaring bankruptcy is scary. Are there alternatives to try before you take such a step? One option is to try debt consolidation.

Debt consolidation is a way for you to gather your debts and address them. You need to weight the benefit of avoiding bankruptcy against the discipline and additional costs necessary for you to try debt consolidation.

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Debt consolidation programs

In addition to combining your debts into one payment, many debt management programs are accompanied by credit counseling to help you learn how to manage your expenses. This is good because if you don’t decrease your spending, you’re going to end up with the same problems.

Debt management programs often take up to five years to eliminate your debt. That’s five years of interest payments added on to your current debt. They often charge a fee as well.

You may be tempted to move your credit card debt onto zero-interest credit cards. Before you do, check to see if there is a transfer fee – sometimes up to 3 percent – as well as an expiration on the zero-percent interest rate – usually between one year to 18 months. If you’re not able to pay off your debt within that year, your payments could become larger than they are now.

Qualifying for a personal loan can by difficult with a low credit score, and if you are carrying a lot of debt you likely have a low credit score. Banks or other lenders will also want collateral such as a house or car. Some loans also include origination fees or a pre-payment penalty.

Home equity loans include application fees and closing costs as well as requiring you to put your house up as collateral.

A credit counseling agency can help you manage your debt and provide education and counseling. Some nonprofit organizations will offer their help at low or no cost to you. If you find such an organization, make sure:

The counselors are qualified

You understand what services are being offered

All fees are discussed up front

You read any contract before you sign it

Consider each of these options carefully. Each require years before you pay off the debt and include extra debt just to use them.

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tag:www.lewismonroe.com,2018:/blog//81303.35352912018-12-06T12:41:34Z2018-12-06T12:40:34Z
It is never too early to begin planning for your future, and that includes your estate plan. Estate planning as early as in your 20s is a wise choice because there is never a guarantee on the length of a person's life.

As a 20-something-year-old, you might think it's too soon to plan for your future retirement or to set up a will, but it's not. You may not plan to die any time soon, but a good estate plan still protects you in the case of serious injury (if you can't take care of yourself). A health care advocate, your health care proxy, is designated through your estate plan. This person helps take care of your needs if you are unable to due to injury or illness.

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Your next order of business should be to name a durable power of attorney along with your health care proxy. The durable power of attorney has the right to make financial decisions on your behalf. A health care proxy makes medical decisions. Together, they'll make sure you get the care you need and have the finances to support that care.

A durable power of attorney is great for people who plan to travel, too. They have the ability to help with taxes and finances while you're away, so you don't have to come back to the United States to handle your affairs.

Setting up these two important designations now is a good start to your estate planning. Our site has more on what you can do to start creating a plan that works well for your situation.

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tag:www.lewismonroe.com,2018:/blog//81303.35164322018-11-23T16:29:12Z2018-11-23T16:28:12Z
If you realize Chapter 7 bankruptcy is the best way to improve your finances, it won't be long before you're learning more about the process and focusing on the next steps.

Before you can make a final decision, it's a must to understand the benefits of Chapter 7 bankruptcy. Here are a few of the best:

A fresh start: Once your Chapter 7 bankruptcy is complete, a good portion of your debt is gone for good. This gives you a fresh start, thus allowing you to better plan your finances in the future.

No repayment plan: The biggest concern with Chapter 13 bankruptcy is the repayment plan that lasts three to five years. With Chapter 7 bankruptcy, you get to keep all the income you earn in the future.

No debt limit: It doesn't matter how much debt you have, you can file for Chapter 7 bankruptcy as long as you pass the means test.

It's fast: A Chapter 7 bankruptcy discharge typically occurs within two to three months of filing. With Chapter 13, the repayment plan means that you'll be dealing with this for a minimum of three years.

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Although there are many reasons to file for Chapter 7 bankruptcy, it doesn't necessarily mean that you should do so. However, after learning more, you're in a better position to make a confident decision.

A Chapter 7 bankruptcy filing is a serious decision. Learn more about the process, focus on the benefits and decide if it's the best way for you to improve your finances both now and in the future.

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tag:www.lewismonroe.com,2018:/blog//81303.35037772018-11-09T00:25:42Z2018-11-09T00:24:42Z
Chapter 13 bankruptcy, unlike Chapter 7, is not a liquidation bankruptcy. With this form of bankruptcy, you repay what you owe over a three-to-five-year timeframe.

With Chapter 7 bankruptcies, your assets may be sold to pay down debts, but your remaining debts are discharged soon after. Your debts may also be discharged in Chapter 13 bankruptcy, but only after you complete the repayment plan.

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Many people choose Chapter 13 bankruptcy because they don't have other options. Chapter 13 is for people who have an income or assets that exceed what is allowed in a Chapter 7 bankruptcy.

Further, with Chapter 13 bankruptcy, you don't have to give up your assets. Therefore, you can continue to keep your home or vehicle. You could potentially lose them if you file Chapter 7 bankruptcy.

Chapter 13 bankruptcies are for individuals with up to $307,675 in unsecured debts and up to $922,975 in secured debts. That means that even someone who has a high income and high debt ratio can seek this kind of bankruptcy. Typically, Chapter 7 requires a means test, and individuals have little or nothing to their names.

Chapter 13 bankruptcy isn't right for everyone, but it is one of the many options open to people today. If you are drowning in debt but still have a steady income, it could be a good way to keep your assets and pay them off at the same time.

Reducing your financial stress can help you as you work to rebuild your financial health, which is the goal of any bankruptcy. An experienced Florida bankruptcy attorney can help you.

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tag:www.lewismonroe.com,2018:/blog//81303.35016732018-11-08T20:51:01Z2018-11-07T17:40:33Z
Are you considering filing for bankruptcy but are concerned about how your assets could be affected? If you have set up a trust as part of an estate plan, you may have worries of what may happen to that property due to your bankruptcy.

As an individual, when you file for bankruptcy, you will be assigned a trustee by the court. This trustee will oversee your assets and can take unprotected assets to sell off and pay your creditors. Assets that are not eligible to be used to pay off bankruptcy debts include your home, retirement savings accounts and any vehicles you own.

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A revocable trust

When you set up a revocable trust, you are referred to as the grantor and you can place whatever assets you like into the trust. You will also name beneficiaries who will have the assets transferred to them at the time of your death. A revocable trust provides flexibility as you can make changes to the trust at any time while you are still alive. Be advised, a revocable trust is not protected in bankruptcy and a trustee can use assets contained in the trust to pay off creditors.

Irrevocable trust

Once an irrevocable trust is set-up, you as the grantor will lose the opportunity to change, access or even cancel the trust. Once you place assets into an irrevocable trust, you are giving up any ownership of that asset. The benefit of an irrevocable trust is that since it is removing ownership, it will take the asset off your estate which will relieve you from tax liability. An irrevocable trust also provides you protection. Because you will no longer be the owner of an asset in the trust, those assets are unable to be used to pay off creditors.

Beware of fraudulent transfers

Be careful if you think you can use an irrevocable trust to hide assets and avoid paying off creditors. There are protections in place that will watch out for this type of behavior. During a bankruptcy, a trustee can void most transfers made in the previous three months and even some made within the last year if they feel there is fraudulent activity.

If are considering filing for bankruptcy and want to know how you can best protect your assets, you should contact an estate planning expert who can provide guidance for your particular situation.

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tag:www.lewismonroe.com,2018:/blog//81303.34996142018-11-06T21:31:35Z2018-11-06T21:30:35Z
Credit card debt has reached a high point in America, according to an annual study by Experian, and many people are having to face the hard task of paying off their balances. If you have already reached your goal of paying off credit card debt, your instinct might be to get rid of the cards and avoid temptation. But, rebuilding your credit may actually be easier if you keep the same credit card. ]]>
Using history to rebuild your credit score

Most lenders rely on FICO scores to determine how trustworthy a particular borrower is. For many, paying off credit card debt is motivated by improving this score so that they can get approved for a new house, car, or other expense. But, although it may seem like a good idea to get rid of the credit cards that put you in debt in the first place it's important to remember: the length of your credit history is 15% of your overall credit score. By cutting up your old cards and starting over, you lose the benefit of having a long history to work with.

Having a credit card also contributes to your "credit mix," which is 10% of your credit score. FICO considers your combination of mortgages and other loans, along with credit cards, when calculating your score. This is especially helpful for younger people who have not acquired a mortgage, leaving their portfolio with little information.

Taking advantage of rewards

Keeping your credit card also means you can take advantage of rewards programs. If you stick to mindful purchases and pay the balance every month, you can quickly accumulate cash rewards, travel miles and other perks that can help with household expenses. This can be an easy way to make credit cards work for you, all while rebuilding your credit score.

Paying off credit card debt is no easy task. To reach the end, or near the end, of that journey is an accomplishment in itself. With careful planning, you can use those newly paid off credit cards to build towards a new financial future.

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tag:www.lewismonroe.com,2018:/blog//81303.34854082018-10-23T10:36:32Z2018-10-23T10:35:32Z
As a small-business owner, you want to make sure you protect your interests. You work hard to keep your business up and running, but with declining sales and higher expenses, you're finding it difficult to make ends meet. You think the end is near but what options do you have?

If you do not want to close your business, there is an option of going through Chapter 11 bankruptcy. This form of bankruptcy is designed for reorganization. The court-appointed trustee assists during the reorganization; the business owner can take this position if they wish.

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During the Chapter 11 process, you'll have to submit plans for reorganization to the creditors you have. If the creditors vote and agree to the plan, then the plan goes to the court. If the court also agrees that it is fair, then it will be approved.

Reorganization plans are interesting because they vary. Some plans create payments to creditors for a period of 20 years or longer. Others are shorter. All plans focus on the specific needs of the business in question, so it is not easy to find a cut-and-paste solution to a business reorganization issue.

If you wish to keep your business up and running, this reorganization plan may be the best option for you. Other kinds of bankruptcy are also possible, though, they often result in the closure of your business. Decide carefully on what you want to see happen before you apply for bankruptcy. The right business plan could actually help you emerge from bankruptcy with stronger finances than ever before.